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Equity partner in MSB, Indebank to list on MSE

The Public Private Partnership Commission (PPPC) has said the approved strategic equity investor in Malawi Savings Bank (MSB) and Indebank Limited will have to facilitate the listing of the banks on the Malawi Stock Exchange (MSE) within three years.

PPPC chief executive officer Jimmy Lipunga told journalists in Blantyre on Friday when announcing the outcome of the evaluation of bids that the investor will take up shareholding of between 51 percent and 75 percent, but the actual allocation would depend on the level of capital subscription and negotiations.

Lipunga: The results are subject to negotiations and final approval
Lipunga: The results are subject to negotiations and final approval

On the basis of the evaluation committee that comprised independent professionals from the Economics Association of Malawi (Ecama), the University of Malawi’s economics department, the Office of the Director of Public Procurement (ODPP) and independent eminent economists, PPPC approved the designation of FDH Financial Holdings Limited as a preferred bidder on MSB.

“The commission will, however, want to negotiate upwards the price offered by FDH Financial Holdings, namely K4.49 billion.  The commission is also anxious about how the bidder will progress the core objectives of MSB alongside the bidder’s existing banking business,” said Lipunga.

FDH Holdings Limited is the parent company of FDH Bank.

PPPC is expected to finalise the sale of the bank within one week.

On the part of Indebank, he said the commission did not designate any of the conforming three bidders, National Bank of Malawi (NBM), FMB Limited and Prudential Holdings and Rinascimento, as a preferred bidder due to “material issues” identified in each of the bidders.

PPPC will invite the three to submit their best and final offers within two weeks after invoking a provision in the bidding procedures.

Lipunga said the facilitating of listing on MSE will be possible if the equity investor has transformational capabilities to unlock significant value of the entity.

It is envisaged that the listing will target up to 20 percent shareholding, he said.

The investor will also have to economically empower employees through the establishment of an employee share ownership scheme (Esop) of up to five percent and a possibility of an additional five to 10 percent through private placement.

Up for sale: The MSB head office complex in Blantyre
Up for sale: The MSB head office complex in Blantyre

“In the case of MSB, government will consider allocating up to 10 percent to a broad based savings and investment cooperative as a component of Malawian participation and as a vehicle for savings mobilisation,” said Lipunga.

He said the announced results are subject to negotiations and final approval by the Minister Responsible for Public Private Partnerships (PPP).

Lipunga said there are no contractual obligations being established at this stage until negotiations are finalised and approval granted.

Of the two struggling banks, the sale of government-owned MSB has raised controversy with the Malawi Law Society (MLS) and a legal expert in financial services regulation Sunduzwayo Madise arguing Parliament has no say on the sale while a legal opinion from Kamudoni Nyasulu, sought by Budget and Finance Committee of Parliament, said the sale of the bank without parliamentary approval cannot go beyond 49 percent shareholding. n

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One Comment

  1. This is positive development in promoting cooperative movement in malawi. If the coperatives can own 10 percent then the government scores a point. This was there during gondwes tenure at finance then

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